Forex Market Review – Swiss franc lifted by SNB chief resignation

Important: This page is part of archived content and may be outdated.

The euro rose today against most major counterparts based on fundamentals as well as short covering of positions. EURUSD had began the trading week at a 16-month low but market sentiment picked up ahead of the meeting between French President Sarkozy and German Chancellor Merkel. In a joint press conference after they met today in Berlin they said “really good progress” is being made in negotiations to create a “fiscal compact” for the euro zone to save the euro.

However, there was still some uneasiness by investors and this was evident after a German T-bill sale resulted in negative yields for the first time as investors sought German treasury bills as a safe haven.

EURUSD opened New York at 1.2766 and closed up at 1.2771.

The Swiss franc jumped to the strongest level since September against the euro after the head of the Swiss National Bank, Philippe Hildebrand announced his resignation today amid a scandal surrounding a controversial currency trade by his wife. The central bank said in a statement its cap of 1.20 francs per euro “remains unchanged.” It imposed the floor on the euro on September 6 in an effort to curb franc strength.

EURCHF dipped to1.2105, the lowest level since September 2011 from 1.2147 immediately after the news, then settled to 1.2121. USDCHF touched 0.9489 from 0.9537 and after rallying throughout the US session, closed not far off from the day low.

The dollar traded a range against the yen between 76.79 and 76.91. Euro touched a low of 97.80 against the yen before rising back up to 98.14.

The pound rallied to a high of 1.5468 against the dollar compared to the Friday low of 1.5374.